GIP to Acquire $4.3 Billion Stake in Spain’s Gas Natural

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  • GIP buys 20% stake in Gas Natural from Repsol, Criteria Caixa
  • Repsol sees capital gain from sale of about 246 million euros

Global Infrastructure Partners agreed to buy a 20 percent stake in Spain’s Gas Natural SDG SA for 3.8 billion euros ($4.3 billion) from shareholders Repsol SA and Criteria Caixa.

Repsol, Spain’s biggest oil company, and Criteria each sold 10 percent stakes in the natural gas distributor for 19 euros a share, according to a statement from Madrid-based Repsol on late Monday. Repsol said it would see a capital gain from the sale of about 246 million euros and Criteria said it would make 218 million euros.

“Gas Natural has an outstanding portfolio of gas and electricity assets that generate strong, stable cash flows,” Adebayo Ogunlesi, chairman and managing partner of New York-based GIP, said in a separate statement. “This transaction is in line with GIP’s strategy of investing in high quality, industry leading companies and assets.”

Barcelona-based Gas Natural operates in more than 30 countries and has over 23 million customers, according to its website. GIP, which manages about $33 billion for investors, is a global independent infrastructure fund focused on energy, transport, waste and water assets. The firm’s portfolio includes investments in the clean-energy assets of Spain’s Actividades de Construccion y Servicios SA, according to its website.

Gas Natural shares fell 0.3 percent to 18.46 euros at 10:32 a.m. in Madrid after earlier gaining as much as 1 percent. Shares in Repsol fell 1.4 percent after earlier gaining as much as 0.7 percent.

Madrid-based Repsol has joined peers in cutting spending and selling assets to cope with the rout in crude prices, offloading its stake in a British wind farm, firing staff around the world and reducing its dividend.

“While we do not take a view on the outcome of the stake sale, there has been substantial focus on Repsol’s balance sheet,” Goldman Sachs Group Inc. said in a research note Tuesday. “We still see potential for hybrid issues and further asset disposals through the balance of the year to continue to push net debt lower.”

‘Less Influence’

“It’s positive for Gas Natural because it can develop its business plan under less influence from Repsol and Caixa,” said Alberto Espelosin, a fund manager at Abante Asesores Gestion in Madrid. “It’s good for Repsol because it continues the process of selling assets.”

Before the deal, Criteria Caixa owned about 34 percent of Gas Natural while Repsol owned about 30 percent, according to the company’s website. Gas Natural has a market valuation of about 18.4 billion euros. It closed at 18.51 euros on Monday.

As a result of the transaction, Criteria and Repsol have agreed to terminate the shareholders’ agreement between Caixa and Repsol regarding Gas Natural. Gas Natural was advised by Citigroup Inc. while Repsol was advised by Deutsche Bank AG.